Fun vs. Productivity — What is the Market Telling Us?

Every now and then I come across an article that raises some interesting issues in the world of wireless technology. A recent CNET artilce talks about the differing rates of adoption for camera and so-called “smart” phones.

Realms of Competition – One of the major challenges facing smartphones is that they are competing with a lot of other enterprise purchases. The kind of employee who is eligible to get a corporate-sponsored smartphone (I am willing to speculate that the majority of smartphones are purchased by companies for employee use and very few are purchased by individuals for their own use without reimbursement) is also likely weighing/already has a Blackberry, other PDA, or mobile phone. New smartphones will likely be viewed as replacements or substitutions for existing PDA or mobile phone purchases. In this economic climate, I don’t think that it would be particularly easy to argue that it is “mission critical” to replace a slightly aged PDA or mobile phone with a new smartphone unless there is just an absolutely critical enterprise application (such as email) that the new device enables.

For cameraphones, the competitive landscape is much different. I would argue that camera phones do not compete with digital cameras — they actually compete with non-camera handsets. I don’t know any cameraphones available in the U.S. that offer megapixel counts rivaling even low-end digital cameras. When a customer goes into a mobile phone shop (online or offline), the real decision process is camera phone vs. non-camera phone. As the price differential between camera-enabled and non-camera phones continues to shrink, I expect that the adoption rate for camera phones will continue to increase.

Price – On a related note, camera phones and smartphones compete in entirely different price bands. Whereas camera phones are now available for less than $100, most smartphones are available for $400 and up. There simply aren’t a lot of customers who routinely spend $400 or more on a mobile phone.